Sharechat Logo

JB Hi-Fi's NZ sales nudge higher as turnaround continues

Monday 12th August 2019

Text too small?

JB Hi-Fi's New Zealand sales nudged higher as the Australian discount consumer electronics retailer continued its turnaround plan for an underperforming Kiwi business. 

The retailer's New Zealand sales increased 2 percent to $236.2 million in the year ended June 30, in line with the $240 million guidance it offered in February when it raised its forecast by $20 million. The Australian parent retained a conservative forecast for the coming year, predicting flat sales.

JB H-Fi closed an unprofitable New Zealand store in the period, leaving it with 14 outlets as at June 30. On a same-store basis, sales were up 8.2 percent. Online sales jumped 38 percent to $13.3 million, and now account for 5.6 percent of revenue, up from 4.1 percent a year earlier. 

The retailer said sales growth was supported by communications, fitness and audio equipment and small appliances. 

The latest government data show the value of New Zealand retail sales of electrical and electronic goods increased 3.2 percent to $2.73 billion in the nine months ended March 31 from the same period a year earlier, even as the volume of sales were up 12 percent. 

Warehouse Group-owned rival, Noel Leeming, which operates 77 stores, reported year-to-date third-quarter sales of $704.3 million, up 5.7 percent from a year earlier, or 3.9 percent on a same-store basis. Another competitor, Harvey Norman's first-half New Zealand sales were up 1.6 percent at $513.2 million on both an aggregate and same-store basis. It operates 39 stores in New Zealand.

Margins on consumer electronics have been increasingly squeezed by vigorous competition and cheap imports, contributing to the demise of the debt-laden Dick Smith Electronics in 2016. 

JB Hi-Fi started repositioning the Kiwi business in 2016, pulling out of whiteware retailing, which wasn't making money.

Today, it said it's still pursuing that strategy of improving performance, after reporting a loss of $1.9 million on an earnings before interest and tax basis compared to an ebit-loss of $2.9 million a year earlier.

Gross margin shrank 37 basis points to 17.3 percent due to the mix of sales. However, the retailer trimmed 57 basis points from its cost of doing business to a ratio of 16.7 percent of sales. 

JB Hi-Fi's group sales increased 3.5 percent to A$7.1 billion and net profit was up 6.4 percent at A$372.8 million. The board declared a final dividend of 51 Australian cents, taking the annual return to A$1.42. The ASX-listed shares jumped 7.8 percent to A$30.14 in early trading. 

(BusinessDesk)

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress
MARKET CLOSE: NZ shares dip on eve of major regulatory decisions
NZ dollar sees off global headwinds, holds above 65 US cents
NZ dollar holds above 65 US cents; dairy auction prices mixed
Dairy index falls on weaker butter, milk fat demand
MARKET CLOSE: NZ shares join global decline; US tariff move weighs on exporters
NZ dollar holds steady; RBA leaves cash rate unchanged
Microsoft tax settlement a 'really good deal'

IRG See IRG research reports